Respondent brews beer. In 1987, respondent applied to the Bureau of Alcohol, Tobacco

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1 ORubin v. Coors Brewing Company 514 U.S. 476 (1995) Justice Thomas: Respondent brews beer. In 1987, respondent applied to the Bureau of Alcohol, Tobacco and Firearms (BATF), an agency of the Department of the Treasury, for approval of proposed labels and advertisements that disclosed the alcohol content of its beer. BATF rejected the application on the ground that the Federal Alcohol Administration Act [FAAA] prohibited disclosure of the alcohol content of beer on labels or in advertising. Respondent then filed suit in the District Court for the District of Colorado. The Government took the position that the ban was necessary to suppress the threat of strength wars among brewers, who, without the regulation, would seek to compete in the marketplace based on the potency of their beer. The District Court upheld the ban on the disclosure of alcohol content in advertising but invalidated the ban as it applied to labels. Although the Government asked the Tenth Circuit to review the invalidation of the labeling ban, respondent did not appeal the court s decision sustaining the advertising ban. The Court of Appeals affirmed the District Court. We conclude that the ban infringes respondent s freedom of speech, and we therefore affirm. Soon after the ratification of the Twenty-first Amendment, which repealed the Eighteenth Amendment and ended the Nation s experiment with Prohibition, Congress enacted the FAAA. The statute establishes national rules governing the distribution, production, and importation of alcohol and established a Federal Alcohol Administration to implement these rules. Section 5(e)(2) of the Act prohibits any producer, importer, wholesaler, or bottler of alcoholic beverages from selling, shipping, or delivering in interstate or foreign commerce any malt beverages, distilled spirits, or wines in bottles unless such products are labeled [to] provide the consumer

2 with adequate information as to the alcoholic content thereof (except that statements of, or statements likely to be considered as statements of, alcoholic content of malt beverages are prohibited unless required by State law and except that, in case of wines, statements of alcoholic content shall be required only for wines containing more than 14 per cent of alcohol by volume) The Act defines malt beverage[s] in such a way as to include all beers and ales.. Implementing regulations promulgated by BATF prohibit the disclosure of alcohol content on beer labels. In addition to prohibiting numerical indications of alcohol content, the labeling regulations proscribe descriptive terms that suggest high content, such as strong, full strength, extra strength, high test, high proof, pre-war strength, and full oldtime alcoholic strength. The prohibitions do not preclude labels from identifying a beer as low alcohol, reduced alcohol, non-alcoholic, or alcohol-free. By statute and by regulation, the labeling ban must give way if state law requires disclosure of alcohol content. Both parties agree that the information on beer labels constitutes commercial speech. We now apply Central Hudson test to 205(e)(2). Respondent seeks to disclose only truthful, verifiable, and nonmisleading factual information about alcohol content on its beer labels. Thus, our analysis focuses on the substantiality of the interest behind 205(e)(2) and on whether the labeling ban bears an acceptable fit with the Government s goal. The Government identifies two interests it considers sufficiently substantial to justify the labeling ban. First, the Government contends that it advances Congress goal of curbing strength wars by beer brewers who might seek to compete for customers on the basis of alcohol content. Respondent counters that Congress actually intended the FAAA to achieve the far different purpose of preventing brewers from making inaccurate claims concerning alcohol content. According to respondent, when Congress passed the FAAA in 1935, brewers did not

3 have the technology to produce beer with alcohol levels within predictable tolerances a skill that modern beer producers now possess. Further, respondent argues that the true policy guiding federal alcohol regulation is not aimed at suppressing strength wars. If such were the goal, the Government would not pursue the opposite policy with respect to wines and distilled spirits. Although 205(e)(2) requires BATF to promulgate regulations barring the disclosure of alcohol content on beer labels, it also orders BATF to require the disclosure of alcohol content on the labels of wines and spirits. Rather than suppressing the free flow of factual information in the wine and spirits markets, the Government seeks to control competition on the basis of strength by monitoring distillers promotions and marketing. Respondent quite correctly notes that the general thrust of federal alcohol policy appears to favor greater disclosure of information, rather than less. Respondent offers a plausible reading of the purpose behind 205(e)(2), but the prevention of misleading statements of alcohol content need not be the exclusive government interest served. The Government here has a significant interest in protecting the health, safety, and welfare of its citizens by preventing brewers from competing on the basis of alcohol strength, which could lead to greater alcoholism and its attendant social costs. The Government attempts to bolster its position by arguing that the labeling ban not only curbs strength wars, but also facilitates state efforts to regulate alcohol under the Twenty-first Amendment. [The FAAA] prohibits disclosure of alcohol content only in States that do not affirmatively require brewers to provide that information. In the Government s view, this saves States that might wish to ban such labels the trouble of enacting their own legislation, and it discourages beer drinkers from crossing state lines to buy beer they believe is stronger. We conclude that the Government s interest in preserving state authority is not

4 sufficiently substantial to meet the requirements of Central Hudson. Even if the Federal Government possessed the broad authority to facilitate state powers, in this case the Government has offered nothing that suggests that States are in need of federal assistance. States clearly possess ample authority to ban the disclosure of alcohol content subject, of course, to the same First Amendment restrictions that apply to the Federal Government. The remaining Central Hudson factors require that a valid restriction on commercial speech directly advance the governmental interest and be no more extensive than necessary to serve that interest. The Government attempts to meet its burden by pointing to current developments in the consumer market. It claims that beer producers are already competing and advertising on the basis of alcohol strength in the malt liquor segment of the beer market. The Government attempts to show that this competition threatens to spread to the rest of the market by directing our attention to respondent s motives in bringing this litigation. Respondent allegedly suffers from consumer misperceptions that its beers contain less alcohol than other brands. According to the Government, once respondent gains relief from 205(e)(2), it will use its labels to overcome this handicap. Under the Government s theory, 205(e)(2) suppresses the threat of such competition by preventing consumers from choosing beers on the basis of alcohol content. It is assuredly a matter of common sense that a restriction on the advertising of a product characteristic will decrease the extent to which consumers select a product on the basis of that trait. In addition to common sense, the Government urges us to turn to history as a guide. According to the Government, at the time Congress enacted the FAAA, the use of labels displaying alcohol content had helped produce a strength war. Section 205(e)(2) allegedly relieved competitive pressures to market beer on the basis of alcohol content, resulting over the long term in beers

5 with lower alcohol levels. We conclude that 205(e)(2) cannot directly and materially advance its asserted interest because of the overall irrationality of the Government s regulatory scheme. While the laws governing labeling prohibit the disclosure of alcohol content unless required by state law, federal regulations apply a contrary policy to beer advertising. These restrictions prohibit statements of alcohol content in advertising, but, unlike 205(e)(2), they apply only in States that affirmatively prohibit such advertisements. As only 18 States at best prohibit disclosure of content in advertisements, brewers remain free to disclose alcohol content in advertisements, but not on labels, in much of the country. The failure to prohibit the disclosure of alcohol content in advertising, which would seem to constitute a more influential weapon in any strength war than labels, makes no rational sense if the Government s true aim is to suppress strength wars. Other provisions of the FAAA and its regulations similarly undermine 205(e)(2) s efforts to prevent strength wars. While 205(e)(2) bans the disclosure of alcohol content on beer labels, it allows the exact opposite in the case of wines and spirits. Thus, distilled spirits may contain statements of alcohol content, and such disclosures are required for wines with more than 14 percent alcohol. If combating strength wars were the goal, we would assume that Congress would regulate disclosure of alcohol content for the strongest beverages as well as for the weakest ones. Further, the Government permits brewers to signal high alcohol content through use of the term malt liquor. Although the Secretary has proscribed the use of various colorful terms suggesting high alcohol levels, manufacturers still can distinguish a class of stronger malt beverages by identifying them as malt liquors. One would think that if the Government sought to suppress strength wars by prohibiting numerical disclosures of alcohol content, it also would preclude brewers from indicating higher alcohol beverages by using

6 descriptive terms. While we are mindful that respondent only appealed the constitutionality of 205(e)(2), these exemptions and inconsistencies bring into question the purpose of the labeling ban. To be sure, the Government s interest in combating strength wars remains a valid goal. But the irrationality of this unique and puzzling regulatory framework ensures that the labeling ban will fail to achieve that end. There is little chance that 205(e)(2) can directly and materially advance its aim, while other provisions of the same Act directly undermine and counteract its effects. Nor do we think that respondent s litigating positions can be used against it as proof that the Government s regulation is necessary. That respondent wishes to disseminate factual information concerning alcohol content does not demonstrate that it intends to compete on the basis of alcohol content. Brewers may have many different reasons only one of which might be a desire to wage a strength war why they wish to disclose the potency of their beverages. Respondent suggests several alternatives [to the labeling ban], such as directly limiting the alcohol content of beers, prohibiting marketing efforts emphasizing high alcohol strength (which is apparently the policy in some other western nations), or limiting the labeling ban only to malt liquors, which is the segment of the market that allegedly is threatened with a strength war. We agree that the availability of these options, all of which could advance the Government s asserted interest in a manner less intrusive to respondent s First Amendment rights, indicates that 205(e)(2) is more extensive than necessary. In sum, although the Government may have a substantial interest in suppressing strength wars in the beer market, the FAAA s countervailing provisions prevent 205(e)(2) from furthering that purpose in a direct and material fashion. The FAAA s defects are further highlighted by the availability of alternatives that would prove less intrusive to the First

7 Amendment s protections for commercial speech. Because we find that 205(e)(2) fails the Central Hudson test, we affirm the decision of the court below. POINTS FOR DISCUSSION 1. Justice Thomas s opinion tells us that, even if common sense suggests that a governmental regulation furthers a legitimate state s interest, it can be thrown out if the larger context of other, competing regulations calls into question the government s logic. What might be some implications of this stance? For example, can a beach town s laws against commercial highway billboards be thrown out because, if the town were really serious about protecting the aesthetics of its environment, it would have also banned the use of fly-by advertisements by airplanes with streamers? 2. Suppose that a nonprofit consumer magazine were to publish on its cover that Coors beer has 4.73 per cent alcohol by volume. This statement would likely not be considered commercial speech. Why, then, does the identical message become commercial when Coors itself disseminates it? Does the identity (and commercial motivation?) of the speaker make the difference? If so, why is it that we consider neither a book review, nor a publisher s insertion of excerpts from that review on a book s dust jacket, commercial speech?